"The tail’s wagging the dog": How outsourcing is eroding NHS services

The market town of Sudbury, Suffolk (population: 12,080) is not what you’d call a hotbed of political activism. It’s a pretty little place: fringed by the river Stour, the rolling countryside to its south is the setting for some of Gainsborough’s most famous works. But it’s been the epicenter for a battle that’s been quietly raging for several months. It’s a battle which tells us some rather disturbing things about modern government, the health service, and the challenges both will face in the years to come.

Our story starts in March 2012, when Serco was awarded a contract, due to begin on 1 October that year, to deliver all of Suffolk’s community health services. For this, it was to be paid £140m for three years’ service. Sudbury WATCH, a local campaign group, understands that it bid £10m less than its rivals. Suffolk Primary Care Trust denied the contract had been awarded purely on cost: the contract stipulated that the original standard of service had to be maintained.

Four weeks after the contract had been awarded. Serco began a consultation, which was issued to its new staff. It was not sent to the county council’s Health Scrutiny Committee, nor to the Local Involvement Network (now Healthwatch). It proposed to cut staff numbers from 790 by 137, but without making any compulsory redundancies among clinical staff.

After receiving disturbing reports from whistleblowers, campaigners began to believe the company was trying to get rid of higher band nurses and therapists. It would leave less experienced therapists doing complex work. They wrote to the Chief Executive of NHS Suffolk in November, and said:

“[It is not] any consolation that job losses will take place through “mutually agreed resignation” or MARS – just another clever way of getting rid of people at minimal cost [...] we are told that staff who refuse to agree to MARS are likely to be given jobs which will require them to drive all over the county as and when required, as well as work to new shift patterns into the evening – an impossibility for staff with young families. This is nothing short of; blackmail’.”

The campaign group received an anonymous letter suggesting that after the contract was awarded to Serco in March 2012, it was subsequently renegotiated over the next few months, in a manner favourable to Serco in breach of procurement rules, and that a substantial sum of money had been paid in September 2012, before the contract started to run in October.

The letter also noted that the company registered with CQC to run Suffolk health services (not Serco but a sub-company called Integrated Clinical Services) was set up a month before the contract was awarded. And that Serco had no track record in running community health services, so NHS Suffolk should have scrutinised the bid more carefully. It claimed the decision was politically driven by the Strategic Health Authority.

In December, Sudbury WATCH took action. It instructed solicitors to issue legal proceedings if NHS Suffolk did not halt the consultation. It argued that, as it involved patient care, the consultation should involve the public. Peter Clifford, the group’s head, told the Suffolk Free Press that he was “not prepared to see Sudbury’s health services wrecked again”. He added: “Combined with the cuts to occupational therapist numbers, community nurses, specialist and district nurses, general health workers and physiotherapists, the end result will inevitably be a serious reduction in the quality of rehabilitation and general care of the elderly.”

Serco claims that the 137 positions has been reduced to 95. However, a spokesman for Sudbury WATCH says: “The number is a red herring. This is about getting rid of experienced professionals. One thing that is for sure is that staff are demoralised. In fact, we understand that at present the company has received too many applications for voluntary redundancy.”

The Acting Chief Executive for NHS Suffolk responded to Sudbury WATCH at the end of last year in a bid to allay concerns. He said: “The CCGs will have the same priority for ensuring good patient care and value for money. Local scrutiny and public input will continue through the usual channels, through the emerging Healthwatch, the Health Scrutiny Committee and the Health and Wellbeing Board. In addition, Serco, like all providers, will be required to carry out regular patient experience surveys to help improve and shape services.”

It did not work. Today the WATCH spokesman tells me: “The legal action against NHS Suffolk and Serco has run into the sand at present because we are up against so much secrecy, fudge and obfuscation. Plus a lack of accountability: NHS Suffolk telling us to ask Serco, Serco telling us to ask NHS Suffolk.”

Time and again I have blogged on how the target-driven culture of outsourcing contracts doesn’t take into account the human element. In Suffolk Serco claims efficiency savings will be generated through hand-held computers. Sudbury WATCH claims that while there’ll be increased assessments they’ll be carried out by less experienced staff, and so the quality of interaction will diminish. The group says that the company is ultimately relying on crude activity analysis of dubious and unreliable statistics gathered in Suffolk in the past couple of years.

And for the umpteenth time we see a clear issue over the lack of transparency surrounding the outsourcing process. Sudbury WATCH’s spokesman says: “Our biggest problem has been securing information. Before the work was outsourced, the PCT’s job was to consult publicly. They could be challenged, but now commercial confidentiality laws mean It’s been very hard for our lawyers to pin them down over their decision making. There’s a real sense you’re dealing with a private company, not the NHS. Freedom of Information requests are met with commercial confidentiality defense, and Serco isn’t even subject to the act. The tail’s wagging the dog.”

And those who have heard about the Government’s stated aims of increasing integration would be right to wonder at how it’ll work in practice. At present a patient might be welcomed to one of Suffolk’s acute hospitals, then be sent to a non acute bed commissioned by the Clinical Commissioning Group (which has replaced the PCT), which is situated in a care home run by The Partnership in Care (another private business), and then be visited by nurses now working for Serco. Is this the fragmented future of public health?

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In response to the claims put forward in the anonymous letter received by Sudbury WATCH, a spokesman for NHS Suffolk told the New Statesman:

“The process to find a new home for community health services in Suffolk was led by a project board. This board consisted of members of the NHS Suffolk board, local GPs, Suffolk Community Healthcare staff, members of patient representative groups, a staff union representative and an NHS Strategic Projects Team.

“Serco was named as the preferred bidder in March 2012 and was chosen as being the organisation that would deliver the best level of healthcare for patients, good opportunities for staff and value for money for the taxpayer.

“The procurement process was run in an entirely proper, appropriate and normal fashion. This process adhered to the guidelines set out by the Cooperation and Competition Panel, which include a formal complaints and appeals procedure. No formal complaints or appeals have been received.

“After being named as the preferred bidder, Serco and NHS Suffolk went through the standard procedure of due diligence and contract finalisation with a schedule of contract payments being agreed. Payments began at the end of September 2012 and have been running regularly ever since.

“Integrated Clinical Services is a company that was established by Serco with the agreement of NHS Suffolk, NHS Pensions and Suffolk Community Healthcare staff as the appropriate vehicle for employing staff and ensuring they retained their proper NHS pension rights.

“Community health services are still being provided by the NHS, delivered free to patients and are subject to the same high standards of patient care and excellence.”

Hannan Fodder: This week, Daniel Hannan gets his excuses in early

Since Daniel Hannan, a formerly obscure MEP, has emerged as the anointed intellectual of the Brexit elite, The Staggers is charting his ascendancy...

When I started this column, there were some nay-sayers talking Britain down by doubting that I was seriously going to write about Daniel Hannan every week. Surely no one could be that obsessed with the activities of one obscure MEP? And surely no politician could say enough ludicrous things to be worthy of such an obsession?

They were wrong, on both counts. Daniel and I are as one on this: Leave and Remain, working hand in glove to deliver on our shared national mission. There’s a lesson there for my fellow Remoaners, I’m sure.

Anyway. It’s week three, and just as I was worrying what I might write this week, Dan has ridden to the rescue by writing not one but two columns making the same argument – using, indeed, many of the exact same phrases (“not a club, but a protection racket”). Like all the most effective political campaigns, Dan has a message of the week.

First up, on Monday, there was this headline, in the conservative American journal, the Washington Examiner:

“We will get a good deal – because rational self-interest will overcome the Eurocrats’ fury”

The message of the two columns is straightforward: cooler heads will prevail. Britain wants an amicable separation. The EU needs Britain’s military strength and budget contributions, and both sides want to keep the single market intact.

The Con Home piece makes the further argument that it’s only the Eurocrats who want to be hardline about this. National governments – who have to answer to actual electorates – will be more willing to negotiate.

And so, for all the bluster now, Theresa May and Donald Tusk will be skipping through a meadow, arm in arm, before the year is out.

Before we go any further, I have a confession: I found myself nodding along with some of this. Yes, of course it’s in nobody’s interests to create unnecessary enmity between Britain and the continent. Of course no one will want to crash the economy. Of course.

I’ve been told by friends on the centre-right that Hannan has a compelling, faintly hypnotic quality when he speaks and, in retrospect, this brief moment of finding myself half-agreeing with him scares the living shit out of me. So from this point on, I’d like everyone to keep an eye on me in case I start going weird, and to give me a sharp whack round the back of the head if you ever catch me starting a tweet with the word, “Friends-”.

Anyway. Shortly after reading things, reality began to dawn for me in a way it apparently hasn’t for Daniel Hannan, and I began cataloguing the ways in which his argument is stupid.

Problem number one: Remarkably for a man who’s been in the European Parliament for nearly two decades, he’s misunderstood the EU. He notes that “deeper integration can be more like a religious dogma than a political creed”, but entirely misses the reason for this. For many Europeans, especially those from countries which didn’t have as much fun in the Second World War as Britain did, the EU, for all its myriad flaws, is something to which they feel an emotional attachment: not their country, but not something entirely separate from it either.

Consequently, it’s neither a club, nor a “protection racket”: it’s more akin to a family. A rational and sensible Brexit will be difficult for the exact same reasons that so few divorcing couples rationally agree not to bother wasting money on lawyers: because the very act of leaving feels like a betrayal.

Problem number two: even if everyone was to negotiate purely in terms of rational interest, our interests are not the same. The over-riding goal of German policy for decades has been to hold the EU together, even if that creates other problems. (Exhibit A: Greece.) So there’s at least a chance that the German leadership will genuinely see deterring more departures as more important than mutual prosperity or a good relationship with Britain.

And France, whose presidential candidates are lining up to give Britain a kicking, is mysteriously not mentioned anywhere in either of Daniel’s columns, presumably because doing so would undermine his argument.

So – the list of priorities Hannan describes may look rational from a British perspective. Unfortunately, though, the people on the other side of the negotiating table won’t have a British perspective.

Problem number three is this line from the Con Home piece:

“Might it truly be more interested in deterring states from leaving than in promoting the welfare of its peoples? If so, there surely can be no further doubt that we were right to opt out.”

I could go on, about how there’s no reason to think that Daniel’s relatively gentle vision of Brexit is shared by Nigel Farage, UKIP, or a significant number of those who voted Leave. Or about the polls which show that, far from the EU’s response to the referendum pushing more European nations towards the door, support for the union has actually spiked since the referendum – that Britain has become not a beacon of hope but a cautionary tale.

But I’m running out of words, and there’ll be other chances to explore such things. So instead I’m going to end on this:

Hannan’s argument – that only an irrational Europe would not deliver a good Brexit – is remarkably, parodically self-serving. It allows him to believe that, if Brexit goes horribly wrong, well, it must all be the fault of those inflexible Eurocrats, mustn’t it? It can’t possibly be because Brexit was a bad idea in the first place, or because liberal Leavers used nasty, populist ones to achieve their goals.

Read today, there are elements of Hannan’s columns that are compelling, even persuasive. From the perspective of 2020, I fear, they might simply read like one long explanation of why nothing that has happened since will have been his fault.

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.